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Applications for Relief Aid by Swiss Crypto Companies Rejected

Switzerland’s Finance Minister Heinz Tännler suggested setting up a specialized fund to bailout the country’s young and struggling blockchain and crypto industry last month but his proposal was met with rejection by the government. A majority of firms in this sector previously applied for COVID-19 relief schemes, but their applications for funds to keep their businesses afloat amidst these trying times were turned down.

The alternative for these companies is to apply for a bank loan under a new 15 million Swiss francs scheme, which will be guaranteed by the federal government and the canton of Zug in a 65-35 proportion respectively. Applications open on May 27 and will close at the end of August. The applications will then be reviewed by an independent, external committee to verify if they are eligible for the loans.

Tännler noted that it is a difficult task to determine who will be tomorrow’s winners in advance” as the long three-month period can result in some applicants dropping out of the race entirely. The government is looking to support only “sustainable” startups, but it remains to be seen what the requirements entail. Startups who apply for the loans may not be able to last until the application and review periods are over.

“A survey by the Swiss Blockchain Federation (SBF) in April 2020 showed that more than two thirds of those startups who applied for a COVID 19 guarantee loan did not receive it. It is clear that we have to act now because the canton of Zug, with the Crypto Valley, has one of the world’s largest ecosystems for blockchain startups,” Tännler shared.

You may also want to read: Should Startups Choose “To Hibernate” to Cope With COVID-19?

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